Penske Racing said the breakup was "mutual" and immediate, The Charlotte (N.C) Observer reported. Team officials said they had no immediate plans for their No. 22 car.
NASCAR fined Busch $50,000 for his obscene gesture and foul language aimed at an ESPN reporter during the Sprint Cup series finale at Homestead-Miami Speedway.
After Busch lost his transmission, he lost his cool against Jerry Punch in the garage. His tirade was caught on video and posted on YouTube.
Team owner Roger Penske said in a statement he appreciates "the victories that Kurt has brought Penske Racing and our sponsors over the past six years."
"While I am disappointed that Kurt will not be racing for our team in the future, both Kurt and I felt that separating at this time was best for all parties, including our team and sponsors," Penske said. "I wish Kurt the best in his future racing endeavors."
Busch issued his own statement, thanking Penske for the opportunity he was given.
"Leaving a great organization and a lucrative contract is not easy, but it's an important step for me and allows me to take a deep breath to work on things that can make me a better driver and a better person," Busch said.
In 2005, Busch was fired by Roush Fenway Racing after being cited for recklessness driving in Arizona. Police said alcohol was involved.